INDU Committee Report

Canada’s services sector is a vital component of our economy. As services provision has grown far more rapidly and consistently than that of goods throughout the past five decades, the shares of the services sector in total economic activity and employment have been increasing steadily over time. Indeed, while services output accounted for 58% of Canada’s gross domestic product in 1975, it accounts for almost 70% today. Moreover, in 2007, the Canadian services sector provided employment for about 12.9 million people, accounting for more than 75% of employment and more than 90% of job creation since the worldwide “commodities boom” began in late 2002. All in all, these developments signal that Canada’s economy has been undergoing profound, long-term structural change away from goods-producing activities and towards services, and it is incumbent upon public policy-makers to keep abreast and adapt their policies, strategies and programs to accommodate this different economic structure.

Although the sector has enjoyed tremendous growth in recent years, Canada’s services sector is not without its set of challenges. The sector, as a whole, faces and will increasingly face a labour skills shortage as Canada’s population ages, the rate of retirement increases, and the labour force shrinks. And certain sub-sectors face industry-specific challenges, such as the tourism and the hospitality industries (e.g., tour operators, hoteliers, convention centres, restaurants and special events) that are striving to cope in a very competitive market that has been struck by a number of political and business developments, including the high value of the Canadian dollar vis-à-vis the world’s major currencies, high fuel prices, lengthy wait times at the border, and confusion surrounding passport requirements.

The Committee has completed an intensive study of the challenges facing the services sector. It began its hearings in November 2007, and engaged 60 witnesses representing many facets of the services sector. The Committee’s final report reflects a wide perspective on the opportunities and challenges facing the services sector. The report offers specific recommendations to the Government of Canada on how it can help the sector adapt to the challenges it is facing. The Committee believes that the Government of Canada should implement its recommendations in a timely fashion.

I would like to thank all of the witnesses who have appeared before the Committee for their presentations and submissions. I also thank the members of the Committee and our committee staff for their hard work on this study.

James Rajotte, M.P.

Chair